2024-03-18
Peter Hellgren Discusses Swedish Labor Law in Interview
In October, it has been two years since the new Swedish Labor Law came into effect, and it is during the autumn that the real consequences for IT consulting firms are expected. The new law has sparked considerable concern about negative implications for consulting companies. Consid's CEO, Peter Hellgren, was interviewed on the subject in Radar.
“The biggest difference we notice is linked to the great uncertainty out there. All companies think differently. What constitutes a place of business? Some interpret it as a country, others as a physical location. And how do you interpret the concept of a specialist? Some stretch it so far as to say that the IT industry is not affected at all. I do not share that view. Unfortunately, my perception is that we are included in it,” says Peter Hellgren to Radar.
The Swedish Labor Law means that client companies that have rented consultants for a period of 24 months within a 36-month period are required to offer employment or pay an amount equivalent to two months’ salary to the employee.
“Peter Hellgren points out that the IT industry is expected to lead the way for Sweden. In the worst case scenario, the new law may hinder this development, not least because a new way of staffing clients can have major consequences for skills supply,” writes Radar, followed by a quote from Peter Hellgren.
“A lot of business knowledge will be lost. If you are forced to replace consultants after 18 months, then the customer loses valuable expertise and insight. Unfortunately, I think we will see this now. Many companies will bring their consultants in-house, as otherwise they risk being affected. It hits hard at the end customer.”
In April last year, Consid held a parliamentary seminar on the Swedish Labor Law, which came into force in October 2022. Then, Stefan Koskinen and Veli-Pekka Säikkälä, both participants in the negotiations between the labor market partners that resulted in the law, revealed that the design of the law was largely influenced by an EU directive from 2008. It was this directive that was largely the reason for the new Swedish Labor Law.
“We do not yet know if IT consulting companies are covered by the new law; our opinion is that it is extremely unfortunate that there is ambiguity here. We do not have control over these ambiguities. Whether one is leased out or not leased out, that is the big question,” Stefan Koskinen said at the time.
Read the full article in Radar here.